Venezuela nationalizes scrap market

Venezuela nationalizes scrap market

Government appoints itself sole agent of scrap collection and export activity.

August 27, 2018
Brian Taylor

The government of Venezuela has nationalized all or part of its recycling sector, including ferrous, nonferrous and scrap paper exporting activities.

An online article from United Kingdom-based business information service Kallanish says the Venezuelan government announced the nationalization step via a “decree published in the Venezuelan Official Gazette.”

A summary of that announcement in Venezuela’s Gaceta Oficial, in Spanish, can be found on this web page of the FinanzasDigital website.

The decree is labeled as Decree No. 3,586 and is listed as coming from the office of Venezuelan President Nicolas Maduro. It states in part that the office of National Executive has reserved the right to “purchase [scrap] aluminum, copper, iron, bronze, steel, nickel or any other type of metal or ferrous scrap in any condition; as well as nonmetallic solid waste, fiber optic and secondary fiber products of paper and cardboard recycling.”

According to the new decree, “Such materials are declared strategic and vital for the sustained development of national industry.”

Earlier this year, the government of Venezuela touted recycling activities as a way to help “solve the problem of waste management and [thus] make the landfill only get the rest of the material that cannot be recycled.”

In terms of industrial output, Venezuela’s steel industry produced 298,000 metric tons of steel in the first half of 2018, making it the sixth largest steel producer in South America. The nation’s output is well behind that of Brazil and Argentina and less than half that of Peru’s. It also produces about 60 percent as much steel as either Chile or neighboring Colombia, and its current output is barely ahead of Ecuador’s.

The scrap nationalization move occurs shortly after Venezuela introduced a new monetary system with a cryptocurrency tie-in. The new currency has reportedly brought construction and other many types of economic activity to a virtual halt in the nation.